The Euro continued to push higher against the US Dollar as expected after prices broke above resistance at the top of a falling channel set from mid-March. The pair is now positioned to test the 38.2% Fibonacci expansion at 1.3928, with a daily close above this barrier exposing the 50% level at 1.4007. Alternatively, a reversal below the 23.6% Fib at 1.3830 targets the channel top, now recast as support, at 1.3793.

We remain sidelined for the time being as near-term technical positioning continues to conflict with our bearish long-term fundamental outlook for the Euro. Overall positioning since late October 2013 has traced out a Rising Wedge, a setup hinting at a looming reversal downward, and we will wait for prices to yield a palatable selling opportunity.